In the wake of the dramatic events yesterday evening when the fate of Newbridge Credit Union was sealed in the High Court, the Central Bank has issued a lengthy statement outlining its fears for the institution.
In the statement, the Central Bank says that an average of €79,000 was withdrawn every day from Newbridge Credit Union since news of a proposed merger with Naas Credit Union first broke to the public last July.
The situation was so bad, the struggling Credit Union has been on “hourly liquidity watch” by the Central Bank since July 30, the Central Bank claimed.
That’s according to the report issued by the Central Bank last night, Sunday, November 10, which added that levels of members’ shares, or savings, withdrawn increased with publicity and protests surrounding its plans.
It has also emerged in the report that after Naas Credit Union pulled out of plans to merge with Newbridge Credit Union phone calls were made to representatives of four major banks to see if they would be interested in stepping into the breach to avoid a liquidation.
The Central Bank feared that if news of the Permanent TSB transfer became public knowledge before it was finalised, there would be a run on the credit union.
It was estimated that within four days or less of the news becoming public, funds available would drop beneath the current Liquidation Trigger Point of €5,858,107.
According to the report, this would likely close the doors of Newbridge Credit Union and prevent the Permanent TSB deal going ahead.
The report also says that the establishment of the Save Newbridge Credit Union Action Group, with its highly publicised protests against the Naas/Newbridge merger and media coverage of the issue led the Central Bank to believe that there would be an uproar in Newbridge if word got out that a merger with Permanent TSB, a bank, was on the cards.
The Report said the Central Bank had serious concerns relating to the financial stability of Newbridge Credit Union, stating that, as of September 30 last, based on its management accounts, it had an excess of total liabilities over total assets of approximately €8 million.